GRA Says Modified Tax Scheme Is Drawing Informal Businesses Into Compliance

GRA Says Modified Tax Scheme Is Drawing Informal Businesses Into Compliance

By News Ghana

In a strategic move to widen the tax net and improve domestic revenue mobilisation, the Ghana Revenue Authority (GRA) has announced that its modified tax scheme is successfully attracting informal sector businesses into the formal tax system. The initiative, which focuses on simplifying tax processes and reducing compliance burdens, is beginning to reshape how small-scale enterprises engage with taxation in Ghana.

The informal sector remains a dominant force in Ghana’s economy, accounting for a significant portion of employment and commercial activity. However, for years, many of these businesses have operated outside the tax system due to complex procedures, lack of awareness, and perceived high costs of compliance. Recognising these challenges, the GRA introduced a modified tax scheme tailored to the realities of informal businesses.

At the core of the scheme is simplification. The GRA has streamlined registration processes and introduced more flexible and accessible tax payment structures. By reducing bureaucratic hurdles, small business owners such as market traders, artisans, and micro-entrepreneurs are finding it easier to register and fulfil their tax obligations without disrupting their daily operations.

Early indications suggest that the approach is yielding positive results. A growing number of informal businesses are voluntarily entering the tax net, marking a shift from resistance to participation. This increase in compliance is not only helping to expand the country’s revenue base but also promoting a culture of accountability among small business operators.

In addition to simplifying tax processes, the GRA has intensified its taxpayer education efforts. Through targeted outreach programmes, workshops, and community engagement, the authority is working to demystify taxation and build trust with informal sector players. Officials believe that improving understanding and transparency is key to sustaining long-term compliance.

The benefits of the modified tax scheme extend beyond revenue generation. By encouraging informal businesses to formalise their operations, the initiative opens up opportunities for these enterprises to access financial services, government support programmes, and broader markets. This, in turn, contributes to overall economic growth and development.

While challenges remain particularly in reaching remote and underserved communities the GRA’s efforts signal a progressive shift in tax administration. Rather than relying solely on enforcement, the authority is adopting a more inclusive and supportive approach that aligns with the needs of the informal economy.

As Ghana continues to refine its tax policies, the success of the modified scheme could serve as a model for other countries facing similar challenges. By prioritising simplicity, education, and trust, the GRA is demonstrating that effective tax compliance in the informal sector is achievable when policies are designed with the taxpayer in mind.